Questions and Answers: Involuntary Allotments From Military Personnel For Commercial Debt

Involuntary allotments
from military personnel for commercial debt

frequently asked questions and answers

1. How does one apply for an involuntary allotment?
   A creditor may initiate this process against a military member by submitting an Involuntary Allotment Application (DD Form 2653) along with a certified copy of a final judgment issued by a civil court. An original and three copies of both the form and the judgment are required. Also, the application must contain the member's full name and social security number for positive identification. The completed package should be sent to the following address:

   Defense Finance and Accounting Service
   Cleveland Center, Code L
   PO Box 998002
   Cleveland, Ohio 44199-8002
   

   A DD Form 2653 may be obtained by writing the address above or by calling (216) 522-5301. Please be sure to include a return address on any correspondence, not just on the mailing envelope.

2. How much time does it take after sending in the application to DFAS before payments begin?
   The regulation which establishes the procedures DFAS must follow when processing these applications contains mandatory time allowances that the military member must be given to respond prior to an involuntary allotment being started. This will normally prevent DFAS from establishing an involuntary allotment until 90 to 120 days after the application is received. However, if the member responds quickly and does not contest the allotment, this time could be shorter.

3. How much of the member's pay can an applicant receive each month? What if there are other allotments in place?
   The Consumer Credit Protection Act, 15 U.S.C. 1673, establishes the maximum amounts that may be withheld from individual's pay for garnishments or other legal process to satisfy commercial debts. This amount is 25 percent of the individual's disposable pay. Disposable pay is the gross pay minus certain authorized deductions such as income tax withholding or debts owed to the government. If the member already has other involuntary allotments in place, applicants may have to wait until that debt is paid prior to receiving any money for their application. Also, if deductions are being made to satisfy child support obligations, it is possible there will be no funds available to satisfy commercial debts for many years to come. In this case, DFAS will notify all applicants of the status.

4. What is the Soldiers' and Sailors' Civil Relief Act of 1940 (SSCRA)? How does it affect an application for involuntary allotment?
   The SSCRA is a federal law which applies at all times, not just when we are at ar. It was designed to protect the legal rights of those who have been called upon to serve their country in the military. There are many provisions in the SSCRA. Most of them allow a service member to delay certain legal actions if his military service affects his ability to participate in the proceeding. There are also provisions which affect a member's financial transaction, such as allowing for lowered interest rates on loans while a member is serving on active duty. However, the portion that is relevant to military commercial debt allotments is 50 U.S.C. App. Sec 520. This section basically says that in any proceeding where the defendant has failed to make any appearance, prior to any default judgment being issued, the plaintiff must file an affidavit with the court stating whether or not the defendant is in the military service, or that the plaintiff is unable to determine that fact after a reasonable effort. If the plaintiff states either that the defendant is in the military service, or that they are unable to determine whether or not the defendant is in the military service, prior to any default judgment, the court shall appoint an attorney to represent the defendant and protect his interest. The fact that a plaintiff or court do not follow this mandatory procedure does not make the judgment void. It does make the judgment voidable at the court's option upon a proper showing of certain proof by the defendant. However, in order to use the military involuntary allotment process, an applicant must comply with the statute. Pursuant to the implementing regulation, DFAS has been given the responsibility to ensure that the procedural provisions of the SSCRA have been complied with prior to starting an involuntary allotment for commercial debt against a military member. Therefore, a judgment issued by a court against a military member, where SSCRA was not complied with, is unenforceable against the military pay of that member. Also, because the SSCRA says these procedures must be followed prior to a default judgment being issued, there is no way to go back, aside from vacating the judgment and starting the process again, to comply with the SSCRA after the fact.

   Questions concerning the involuntary allotment process can be directed to (216) 522-5301.

Last updated: March 12, 1999 at 07:17